Maxin Health CareMaxim Heath Care has reached a $150 million settlement to resolve allegations that it defrauded Medicaid and the Department of Veterans Affairs for more than a decade.d

In a criminal case that has flown under the radar for more than a year, one of the nation’s largest health care staffing agencies has reached a $150 million settlement to resolve allegations that it defrauded Medicaid and the Department of Veterans Affairs.

The U.S. Attorney’s office this morning is expected to announce the settlement with Maxim Healthcare, a Maryland-based medical staffing and home health care company. A press conference is scheduled for noon, but the U.S. Attorney provided no details other than to announce “the resolution of criminal and civil charges, including a nine-figure settlement, against one of the nation’s leading providers of health care services.”

However, officials with the state Attorney General, which was involved in the investigation, confirmed the settlement -- which involves the submitting of false and undocumented claims between 1998 and 2009, as well as operating unlicensed health care staffing offices in five states, New Jersey locations in Atlantic and Mercer Counties.

“False billing to government health care programs has become a blight on our state,” said Attorney General Paula Dow. “Companies like Maxim, that provide health care services to Medicaid patients, are expected to take necessary steps to prevent fraud and abuse by instituting strong compliance programs and maintaining effective internal controls. Failure to do so will not be tolerated.”

Maxim, which has more than 300 offices across the country, was founded by Stephen Bisciotti, the majority owner of the Baltimore Ravens. A company spokeswoman said Bisciotti is currently a minority shareholder and not involved in the company’s operations.

The Maxim investigation was initiated following a complaint by a Medicaid patient who lived in Ocean County.

According to state officials, the matter came to light when the then-55 year-old patient, who has muscular dystrophy and was receiving home nursing services staffed through a Maxim office located in Ocean County, discovered his benefits had exceeded a monthly Medicaid cap.

The patient had maintained detailed records and challenged the veracity of Maxim’s invoices -- and subsequently initiated a lawsuit as a relator on behalf of the federal and state governments. According to the patient’s records, during a 15-month period between 2003 and 2004, Maxim claimed more than 700 hours of services that were not provided.

A multi-state investigation included the New Jersey Attorney General’s Office, through its Medicaid Fraud Control Unit, the U.S. Attorney’s Office, as well as the U.S. Department of Justice, FBI, U.S. Department of Health & Human Services and U.S. Department of Veterans Affairs.

It ultimately evolved into a criminal case that has been kept secret for more than a year, as several low-level employees of Maxim from around the country were charged and pleaded out in proceedings here in New Jersey that the U.S. Attorney’s office kept quiet.

In March 2010, Jason Bouche of Arizona pleaded guilty to defrauding a health care benefit program. He awaits sentencing.

Matthew Skaggs of Texas entered a similar plea in July 2010. He was sentenced to probation.

The total amount of the state and federal civil settlements is $130 million, of which approximately $121.5 million is allocated to the Medicaid program, and approximately $8.5 million to the Veterans’ Affairs program. New Jersey’s share of the more than $55 million in recoveries for the states is approximately $2.7 million.

It marks one of the first healthcare cases employing New Jersey’s False Claims Act statute. Under the terms of the settlement agreement negotiated on behalf of New Jersey, Maxim is prohibited from paying its shareholders any dividends, distributions, or other payments until it has made payment in full, including interest, to the State.

Under a deferred prosecution agreement with the U.S. Attorney’s office, the company will also come under the oversight of a federal monitor for two years.